A suspected glitch in Binance’s trading bots leads to a sharp 50% crash in some crypto tokens in mere minutes.

On Tuesday, several cryptocurrency tokens experienced sharp declines of up to 50% within just 30 minutes on Binance, triggering speculation about a potential trading bot error. Act I, the Prophecy (ACT), suffered a 50% drop, DeXe (DEXE) saw a 30% decline, and dForce (DF) fell by nearly 20%. These dramatic price movements began shortly after 10:31 UTC, without any clear catalyst or explanation for the sudden drops, according to Binance data.

The sell-offs resulted in significant liquidations, with $6.28 million worth of long positions in ACT-tracked futures being wiped out across various exchanges. One trader alone faced a $3.2 million liquidation as part of this broader sell-off.

By 18:30 UTC, the sharp declines continued, with ACT/USDT plunging over 49% in just half an hour. DEXE/USDT and DF/USDT also faced notable drops in a similar timeframe. Large sell orders placed quickly appeared to trigger these steep declines. Meanwhile, other tokens like HIPPO, BANANA31, TST, and LUMIA experienced smaller but similar downturns around 11:00 UTC, with some, such as KAVA, seeing quick rebounds from traders buying the dip.

The affected tokens weren’t related or from the same sector, but data indicated a notable increase in selling volumes across those tokens at roughly the same time. Other tokens on Binance, however, didn’t experience similar selling pressure. A significant factor in the volatility was Binance’s announcement at 10:30 UTC about new leverage requirements and margin tier adjustments for several tokens, including ACT/USDT. These changes applied to existing positions, likely triggering automated position adjustments by trading bots, which exacerbated volatility in perpetual contracts and spilled over into spot prices.

This market turbulence spread to other exchanges, with the same tokens suffering similar declines on both centralized and decentralized exchanges.

On social media, reactions varied from surprise to speculation about a possible bot malfunction causing the abrupt crashes. While CoinDesk could not independently confirm the claims, some experts suggested that the changes in perpetual contract rules could have forced traders to unwind positions, triggering panic that spread across both spot and futures markets.